The losses sustained by the ruling Bharatiya Janata Party (BJP) in three crucial Hindi heartland states — Madhya Pradesh, Rajasthan and Chhattisgarh — are expected to cast a shadow on the budget-making process.

When the 28 per cent tax rate was imposed on certain items under GST, there was a political reaction against it, and the GST Council responded by "really whittling down...quite substantially" the number of products in that slab, Subramanian said.

Modi, who also holds finance and commercial taxes department, said this after holding a review meeting with the department's Commissioner, Additional and Deputy Commissioners and other senior officials at a city hotel here.

In fact, segment leaders like Maruti Suzuki, Tata Motors and Hero MotoCorp have reported de-growth of 34.3 per cent, 45 per cent and 20 per cent, respectively giving a clear indication of a prolonged slowdown in the sector.